The Primary Determinants of Credit Limits Include the Following

question 5

Multiple Choice

The primary determinants of credit limits include the following:

• A)Customer's requirements for the firm's products
• B)Customer's recent payment history
• C)Customer's ability to pay its debts
• D)'b' and 'c'
• E)all of the above

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Definitions:

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on the activities they require.

Fixed Overheads

Expenses that remain constant regardless of production or sales volumes within a specific time frame, like lease payments or wages.

Cost Behaviour

The manner in which a cost changes in relation to changes in business activity levels.

Manufacturing Overhead

All indirect costs associated with the production process, such as the cost of utilities, maintenance, and factory equipment depreciation.